THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LOU DOBBS, HOST: Wolf, thank you, and good evening, everybody. Tonight, deadly force: British police kill a radical Islamist terror suspect. I'll be talking with former New York City Police Commissioner Bernie Kerik, about protecting our cities from terrorists, and some citizens who don't want to submit to searches or surveillance.

"Red Star Rising": China bragging about having some of the latest U.S. technology in its war ships. Did the Chinese steal it? Or are they lying? We'll have the latest for you.

We'll also have a special report from Mexico on whether labor there is being exploited or simply U.S. corporations are providing jobs. And we'll be reporting on what is continuing now to be an economic sham some call free trade.

And we'll be talking with a "Washington Post" principal reporter on the White House CIA leak and report on the investigation.

We begin tonight with a day of fast-moving developments in the hunt for radical Islamist terrorists in London. British police today shot and killed a terrorist suspect in a subway station. They also arrested a terrorist suspect in south London. Police released images of four people who tried to explode bombs in London yesterday.

Matthew Chance reports from London.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): These are days of unprecedented drama on the streets of the British capital as the manhunt continues for the bombers who attempted to attack London's transport system on Thursday.

Police have released images of the men they're urgently looking for.

The first is of a man running at the Oval Subway Station in south London. He's wearing a dark sweatshirt with "New York" written on the front.

The second image is of the man police believe left the device on a London bus. Like the others, it only partially exploded.

The suspected Warren Street bomber in central London is pictured next.

Then the man police believe left his device in Shepherd's Bush to the city's west.

ANDY HAYMAN, POLICE ANTI-TERRORIST BRANCH: Do you recognize any of these men? Did you see them at the three Underground stations or on the bus? Did you see them at a different location? Did you see these men together before or after the incident? Did you see them with anyone else?

CHANCE: And in London's latest war on terror, the first shots have now been fired as well, detectives gunning down a man directly linked, they say, with their investigations. Terrified commuters could only look on.

MARK WHITBY, WITNESS: I was sitting on the tube train. It hadn't pulled out of the station at this time. The doors were still open. And a lad shouted, "Get down and get out."

I looked to my right. I saw a chap run onto the train, an Asian guy. He run onto the train.

He sort of -- he was running so fast he tripped. But he was being pursued by three guys. One had a black gun in his hand, in the left hand. As he sort of went down, they sort of dropped to hold him down, and the other one fired. I heard five shots.

CHANCE: London is a city on edge, still shocked from the carnage earlier this month when 56 people were killed in bomb attacks across the city.

(on camera) These could prove potentially major leads for the police in their ongoing antiterrorism investigation. Unexploded bombs at the scene, people left alive to give interviews who witnessed what happened, and security video to examine closely -- all potentially rich sources for clues, not just about who these bombers are, but where they are and who was behind them.

(voice-over) And as the British capital edges nervously forward, police say they've made one arrest in connection with the bombings, in Stockwell, where the shooting took place. Details are sketchy, but this investigation does appear to be gathering pace.

Matthew Chance, CNN, London.

(END VIDEOTAPE)

DOBBS: New measures tonight to protect our cities from radical Islamist terrorists. The Pentagon and the Department of Homeland Security have reached a draft agreement to give the military sole authority to shoot down unidentified aircraft entering forbidden airspace. The agreement is designed to prevent any confusion over who has the authority to order fighter aircraft to open fire. This agreement comes after a series of security alerts in Washington that led to the evacuation of the White House, the Capitol and other buildings. President Bush today declared the United States stands firmly with Britain in the global war on terror. The enemy in this war, of course, radical Islamist terrorists. The radical Islamist goal is nothing less than the destruction of Western civilization and our values.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The people of Great Britain must understand how strongly America stands with them during these trying times.

PILGRIM: Terrorism experts say the foot soldiers of al Qaeda now reside unobserved in Western countries, often as citizens, but caution that the terror threat is still global.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: We're recognizing more and more that our enemies don't recognize these boundaries, and we can't, either. We should not think that simply because you have homegrown terrorists conducting attacks in London suddenly this is a more local or domestic phenomenon. This is as international as it gets.

PILGRIM: So the initial claim of clearing out the top ranks of al Qaeda and the lieutenants of bin Laden is now a hollow victory as younger and less centrally directed radical Islamists take their place. And these low-profile operatives are freer to move across borders with Western credentials, under the radar.

The challenge: making the intelligence connections. Leads from London point to Oregon. Lackawanna cells connect upstate New York to Yemen. The visit to Pakistan by the London bombers months before the attack on July 7 just realized now by immigration officials.

The common thread -- radical Islamist ideology on a global scale.

Prime Minister Howard of Australia called it a mindset.

JOHN HOWARD, AUSTRALIAN PRIME MINISTER: Those who think that terrorism is incident-specific misunderstand the mind and the workings of the minds of terrorists.

PILGRIM: Governments are having to rethink domestic laws and institute new procedures. For example, in Germany, extradition laws are under scrutiny, all in an effort to apprehend terrorists who do not respect lives or borders.

(END VIDEOTAPE) PILGRIM: Now, some experts say al Qaeda have gone from a type of military hierarchy to a grassroots social movement. There used to be more central recruitment. But now the cells form from the bottom out of friendships and loose affiliations. And experts say that's evolving. But the goals, however, have not changed -- Lou.

DOBBS: Kitty, thank you very much.

Joining me now, one of the country's most respected former law enforcement officials, the former New York City police commissioner, Bernie Kerik.

Bernie, good to have you here.

BERNIE KERIK, FORMER NEW YORK CITY POLICE COMMISSIONER: Thanks, Lou.

DOBBS: The situation in London is difficult. Two weeks after the attacks, sort of a follow-on with precisely the same approach, apparently: three subway trains, a bus. But the bombs didn't work. Any insight into what is going on there?

KERIK: Well, I think in some way it may have been connected. You know, the 7/7 bombings last week, they were well organized, well carried out. This, I think, was -- could have been a follow-up by some of the same group or another group, except it seemed somewhat disorganized, how they got there, where they were going and then none of the devices worked.

DOBBS: In the wake of these attacks, 77 and then the attacks yesterday, New York, other cities putting forward random searches in subways. Are those going to be effective? We have just about four million people in the city who are riding the subways.

KERIK: Four million people on a daily basis. I think 468 terminals, subway stations. You can't say we're going to prevent every attack, because it's virtually impossible, but it's another tool that we can use to help us -- technology-enhanced enforcement, dogs, random searches. Random searches would be another -- another part of the solution.

DOBBS: The New York Civil Liberties Union coming out saying the searches are unlawful, a violation of privacy rights. Your reaction?

KERIK: Don't take the subway. We have to keep the city secure. I fully endorse what Ray Kelly is doing, Mayor Bloomberg. I think it's essential that we protect the citizens of the city, and this is just another way to get there.

DOBBS: London, one of the things that is helping authorities there immensely, as you well know, are these closed circuit TVs that they have all over the place. There's also a great reaction in this country to the use of those surveillance cameras. Are they necessary? Should we be following the British lead here?

KERIK: I don't know if we're following the British lead or they're following us. You know, people would be surprised how many cameras there are in New York City, Times Squares, 34th and 7th, CCTV's in housing projects. We have a lot of them here, which are helpful to us. And they have been extremely helpful to London.

DOBBS: A week ago Homeland Security Chief Michael Chertoff said -- and I want to quote him here, and just get your reaction -- he said a commercial airliner has the capacity to kill 1,000 people. A bomb in a subway car may kill 30 people. He's been criticized for that. Do you think he needs to rethink his approach?

KERIK: You know, I can't answer for them. You know, I think they are both very severe areas. Grand Central on a daily basis, we have hundreds of thousands of people who go through there. Terrorist target? Absolutely.

DOBBS: The Muslim Council -- going back to Britain -- said the British government -- said the British government, instead of reacting specifically, said -- the Muslim Council said the British government should recognize the role of the Iraq war in radicalizing young Muslims. What's your reaction to that?

KERIK: The Iraqi war has nothing to do with this. And here's what I tell a lot of people around this country. On the morning of September 11, 2001, we weren't in Iraq, Afghanistan, Pakistan. Libya hadn't disarmed. We weren't even on a war footing against terror in general. And we suffered the biggest attack in our country's history.

DOBBS: And radical Islamist terrorists, let me ask you straightforward. Do you believe this country should move from this amorphous war on terror to what the war is really about, a war on radical Islamists?

KERIK: I think they have to. I think they have to do it in some of the ways they're doing now in Iraq, Afghanistan, going after the people in these countries. But they also have to go after the hatred. Who's promoting this hate? Who's teaching it? Where's it coming from?

London has an enormous population of people that support bin Laden, support these executions and assassinations. I think those are the people you have to go after.

DOBBS: Bernie Kerik, good to have you with us.

KERIK: Thank you.

DOBBS: We'd like to know what you think about this so-called global war on terror. Do you think the United States should declare that radical Islamists are the enemy in the global war on terror? Yes or no? Cast your vote at LOUDOBBS.com. We'll have the results here later.

The House of Representatives has voted to renew and to extend the Patriot Act. The legislation would make 14 or 16 provisions in the anti-terror law permanent. It would also extend the remaining two measures for a decade. Those measures allow for roving wiretaps, searches of libraries and medical records. Critics say those are a threat to Americans' right to privacy. The Senate will soon vote on a similar bill.

When we continue here, "Red Star Rising." China's secret military program threatening outright the United States and geopolitical stability in Asia. That special report is next.

And support growing for Judge John Roberts in the Senate. The Supreme Court nominee spending a third day on Capitol Hill. A coronation, a confirmation? We'll have that story.

And dangerous dust storms now plaguing the western United States. We'll have the latest on this nation's deadly heat wave and drought. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A critical hearing on China's exploding economic and military power. The U.S.-China Commission heard troubling testimony about China's global ambitions and the United States' failure to acknowledge them.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): China's attempt to buy American-based Unocal is anything but an ordinary business deal. Rather, it's one piece in China's strategic, economic and political goals.

At the U.S.-China Economic and Security Review Commission, witnesses describe China as a country that has acquired technical know-how from foreign corporations, whose economic growth rates far surpass the United States, whose military spending is increasing at a double-digit pace, and as a country that is becoming the regional political leader in the Pacific.

MARVIN OTT, NATIONAL WAR COLLEGE: What this is, is a rising great power, rising against a period of long humiliation, deeply felt, that is now determined to assert its place in the sun. And its place in the sun includes Southeast Asia will become their western hemisphere. This will be their Monroe Doctrine.

SYLVESTER: China is using diplomacy and engagement to redraw the lines of allegiance. This December, Southeast Asian countries will gather in Kuala Lumpur for the East Asia Summit. The United States has been excluded.

The Bush administration was criticized in the commission hearing for ignoring the importance of China, preoccupied with the war in Iraq.

PATRICK MULLOY, U.S.-CHINA COMMISSION: The United States inadvertently has turned over our policy toward China to the corporations. And the multinational corporations, they are not responsible. They are caught up in a system in which they make money to survive, and they don't represent the national vision.

SYLVESTER: One witness summed it up, saying China and the United States are in a high stakes game. China made several smart moves. The United States is distracted, hardly aware that the game has even started.

(END VIDEOTAPE)

SYLVESTER: The U.S.-China Economic and Security Review Commission is very aware of the potential threat China poses, but even though it has a congressional mandate, as an advisory body, it does not have any real power -- Lou.

DOBBS: Except the power to inform and expand the body of public knowledge in this country, which it is certainly doing. Lisa, thank you. Lisa Sylvester.

There is alarming new evidence tonight of just how powerful China's military is becoming. There are new questions, as well, about how China has acquired its military technology and might.

Meanwhile, China is showing off these two Lu Yang II (ph) class destroyers. The two new guided missile destroyers are on display and undergoing sea trials. These appear to be China's first ships equipped with Aegis type technology, Aegis technology first developed almost 25 years ago and still the most advanced system available. It can detect and track 100 targets simultaneously.

That China has this technology is a matter for debate. U.S. national security reports have said China attempted during the 1990s to obtain this technology, most notably through front companies.

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: We continue to find China is pursuing in such a systematic and, as I said, comprehensive way the rapid transformation of its military from this obsolete, 1950s era, territorial defense people's war military into a 21st century capability.

ROMANS: China has been very successful adapting commercial technology for its military. In trade circles, they call that dual use technology. And many China critics fear that espionage is rampant. The Government Accountability Office last week sharply criticized the Department of Defense, saying it relies on blind faith to protect against espionage when foreign firms are involved in defense projects with this country, Lou.

DOBBS: Blind faith? Now that's a remarkable, chilling statement from the agency responsible, how these agencies work. We're talking about espionage. With over 3,000 front companies, the Cox commission some five years ago, saying 3,000 front companies with a specific goal of industrial espionage and spying to acquire the highest technology.

ROMANS: It's remarkable. China watchers say by hook or by crook, China will find the way to get the technology it needs to advance its military ambitions, and has.

DOBBS: Christine, thank you. Christine Romans.

Coming up here next, legal experts lavishing praise on Supreme Court nominee Judge John Roberts. Does that mean his confirmation is assured? Should it mean his confirmation is assured? We'll have the answer right coming up.

And at the center of the White House leak case, a secret State Department memo, the memo uncovered by a senior "Washington Post" reporter, who is our guest here, coming up.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Supreme Court nominee Judge John Roberts today on Capitol Hill, again to meet with senators who will play a key role in his confirmation hearings. Some senators saying the warm reception for Judge Roberts does not, however, guarantee his confirmation will be easy.

Ed Henry reports from Capitol Hill.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice-over): Day three of the John Roberts charm offensive. And senators are still, well, charmed.

BRIAN MCCABE, PROGRESS FOR AMERICA: I think he has the very natural qualities to make a superior judge.

HENRY: Roberts seems to be sailing along so easily that some conservative groups may hold their fire for a future nomination battle.

UNIDENTIFIED MALE: Progress for America planned on spending $18 million to promote and defend the nominee. Our hope is that we don't have to actually spend all the money.

HENRY: Ralph Neas of People for the American Way says the liberal group is mulling its spending decisions on a day-by-day basis but cautions that the battle is far from over.

Indeed, Judiciary Chairman Arlen Specter has been through nine Supreme Court battles, including Robert Bork and Clarence Thomas. He says expect the unexpected.

SEN. ARLEN SPECTER (R-PA), CHAIRMAN, JUDICIARY COMMITTEE: The nomination proceedings that I have participated in have been rock 'em, sock 'em. Something always comes up to make them really fascinating.

HENRY: The next question for Judge Roberts is whether he'll get roughed up much at all. Republicans expect Democrats to dig into Roberts' time as a Justice Department lawyer, to divine his views on hot button issues like abortion, a strategy that has sunk other nominees.

SEN. ORRIN HATCH (R), UTAH: I don't think they're going to get away with that this time. And the reason I don't is I think Democrats know that if they're going to play that partisan game again, in something where the stakes are this large.

HENRY: Democrats insist they're not playing games. They believe Roberts was evasive when he was nominated to a lower court two years ago.

SEN. CHARLES SCHUMER (D), NEW YORK: I don't think this is a game of gotcha. I don't think this is a game of surprise. It's much too serious.

HENRY (on camera): Another key Democrat, Dick Durbin, met with Roberts on Friday and said if the nominee is open and honest in his testimony, it will go a long way, even with senators who disagree with his views.

Ed Henry, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Up next a high level leak at the White House, a State Department memo raising new questions about just who leaked the identity of a CIA operative and when. I'll be joined by Walter Pincus at the "Washington Post," next.

And then, the economic sham some call free trade. Workers earning next to nothing just miles from the border with this country. We'll have that special report.

And in "Heroes", our weekly salute to the men and women who serve in this nation's uniform, one Marine who took on enemy fire trying to save a wounded comrade. His story and a great deal more still ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: New questions tonight about who's telling the truth in the CIA leak case, reports saying two top White House officials, Lewis "Scooter" Libby and Karl Rove, gave testimony to federal prosecutors that contradicts other testimony from reporters.

On Capitol Hill today former U.S. intelligence officers criticized President Bush for his handling of the case. They say the president has been too slow to act in punishing White House officials.

(BEGIN VIDEO CLIP)

LARRY JOHNSON, FORMER CIA ANALYST: We now know from press reports that at least Karl Rove and Scooter Libby were involved. And instead of the president being first and foremost concerned, in my judgment, with protecting this country and the intelligence officers who serve it, we're confronted with a president who's willing to sit by to this day while various political operatives go around and savage the good reputations of people like Valerie and Joe Wilson. This is wrong. This should stop, and it could stop in a heartbeat if the president would simply put a stop to it. He hasn't. That speaks volumes.

(END VIDEO CLIP)

DOBBS: "Washington Post" national security correspondent Walter Pincus joins me now from Washington, D.C. He broke the story this week of the two-year-old classified State Department memo naming Valerie Plame as the CIA agent and which apparently played a role in this leak.

Walter, good to have you here.

WALTER PINCUS, "WASHINGTON POST": Nice to be here, Lou.

DOBBS: This is -- this is an enduring investigation. You heard Larry Johnson, former CIA, lambasting this administration for not bringing it to quick conclusion. You have been reporting on this from the outset. Do you believe that there is a basis for his frustration with how long it's taken for the White House to act?

PINCUS: Well, I think there always is. It's one of these cases where something goes on in the White House and the president either knows about it or doesn't know about it.

And what's really happened since Watergate is once there's sort of a sniff of a scandal, everybody closes down. You don't really have an internal investigation, because whoever does the investigation can be called up to Congress or called into a grand jury, as in the case here. So people just sit by and wait. The president said he wants people to come forward. And we'll see. And we now have to wait for a very careful prosecutor to finish his investigation.

DOBBS: You made it clear in your reporting, you believe him to be a very careful prosecutor. He is certainly a deliberate one. Do you think that, in and of itself, suggests that this investigation is moving to broader and deeper and more significant issues than originally expected?

PINCUS: I think, based on the experience I've had with him -- I ran into him, first, when he did the Kenya bombing trial in New York in 2001, and I think they must have spent two or three years on that -- he's very careful, he's very precise. And then I think, instinctively he would not have taken this case all the way up to the Supreme Court if he didn't think there's something serious at the bottom.

DOBBS: And there is something serious in that on July 1st -- various timelines in this -- but on July 1st Lawrence O'Donnell says it's Karl Rove, unequivocally, straightforwardly. Then the attorney for Karl Rove moves forward, and, since then, events have accelerated. Do you believe that was the incipient point for the burst of developments that we're now seeing over the past two weeks here?

PINCUS: In think it's, probably in my mind, much more important when Matthew Cooper's notes got released. And that really put the finger on Mr. Rove. Having somebody say it on television doesn't make that much difference. But when you have documents that are coming out of a grand jury then I think you've got something.

DOBBS: You've definitely got something and we've also now got, because of your reporting, a break on what was a secret memo. We are starting to see more information being leaked, including a so called -- well, a memo with a secret paragraph in it. How much more leaking -- it's amazing the leaks that are attending a case on leaks. Is it your judgment that that's going to continue to accelerate? Will it outrun the investigation?

PINCUS: Well I'm not sure it outruns the investigation. It fuels public interest in the investigation. This had been going on for, you know, more than almost a year and a half. And it's been pretty well held up till now. But I think it's also the fact that things are breaking loose. More people are involved, and I think that's how leaks happen.

DOBBS: And those leaks that happen, in part, happen because reporters have relationships with confidential sources in which there is mutual trust. And the attempts to -- well, not attempts, the subpoenas of you, a host of other reporters, including "New York Times" reporter Judith Miller, we're seeing this prosecutor go after the recipients of those leaks. Do you think that is a healthy development and a rational one in this case?

PINCUS: Well I think when you have a leak situation, and it's really just between the reporter and the source, and in the case of release of somebody's name, that is the crime. If you can't get it any other way then I think you have to go to the reporter. Then the question is how does the prosecutor go about it? And I think Fitzgerald has, in my experience, because I was subpoenaed, I did not give up any information about my source until my source had gone to the prosecutor, confirmed what I had written in the paper, and then, through his lawyer to my lawyer, made it clear to me that he was releasing me, but only to talk to the prosecutor, and not to give out his name or what transpired that I hadn't already written publicly, so I haven't done it.

DOBBS: The protection of sources, confidential sources, Judith Miller is certainly not -- and nor have you at any time suggested you are above the law, nor has any our journalist, but they are paying the penalty for what the law requires. Do you believe that ultimately this will have a chilling effect on the ability of the press if this continues, this trend, to break important news in the public interest?

PINCUS: I know a lot of people in my profession say that. More than half of the people I deal with are in the intelligence field, and they take risks every day, giving me information that is classified, could cost them their jobs, could get them in trouble. I haven't had any diminution of sources. Sourcing is a trusting situation. A lot of people --

DOBBS: You say that Walter, but I think it's interesting that you followed a process when you were subpoenaed that adhered to the highest standards of preserving that trust. Don't you think that played an important role in that?

PINCUS: I think it played an important role, but the other side of this whole confidential source business is that there are sources that are putting out information that's no good.

DOBBS: Well that's a different story for another time. Walter Pincus, we thank you for being here.

Are the nation's biggest companies searching for the cheapest labor? Is that exploitation or just good business? We'll have a special report for you next from the border with Mexico.

And the crew of the Shuttle Discovery. They're back at Kennedy Space Center. They're ready for a Tuesday launch. New questions, however, on whether the shuttle is ready to fly. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now, the economic sham some call free trade -- American corporations setting up factories overseas in their quest for cheap labor. One company, Alcoa, operates a plant in Acuna, Mexico, just across the U.S. border. Workers there are paid a barely subsistent living wage by comparison to the United States. But now Alcoa is threatening to shift the jobs there to Honduras where workers are paid even less than their Mexican counterparts.

Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): Many of the people in this neighborhood work in Maquiladoras -- factories owned by multinational companies employing Mexican labor. The practice has the full support of the United States.

BUSH: It will improve -- boost demands for our goods. It'll help them reduce poverty. See, as wealth spreads out through the neighborhood, it will help create a vibrant middle class.

TUCKER: This neighborhood is three miles from the border with America. The workers we spoke to are production line workers for Alcoa. The factories they work in stand in stark contrast to the living conditions of the workers. The average wage of $1.21 an hour is not enough, the workers told us, to live on. This woman's husband has worked for Alcoa for 14 years. Her family can't afford many basic necessities

UNIDENTIFIED FEMALE, (through translator): I am unable to eat meat every day. I can't have fruit every day.

TUCKER: All of the workers we spoke to would only speak if they remained anonymous, for fear of reprisals by the company -- a fear that Alcoa told us is unfounded. Still the workers are afraid, afraid because the company has made it clear that labor costs are cheaper in its new plant in Honduras, where two workers can be hired for the price of one here in Acuna.

UNIDENTIFIED (through translator): They've been threatening us all along, every time we talk salaries, that's what they come up with, threats.

TUCKER: To make up the difference between their paycheck and their bills, some workers at the Piedras Negras plant sell their blood across the Rio Grande River in Eagle Pass, Texas, where they can make an additional $45 a week. In response, Alcoa defends its wages saying that it pays among the highest wages in whatever regions it operates. The company characterizes itself as being very aggressive on cost controls, because if it doesn't keep pressure on wages and drive down costs, it will lose business to competitors who will undercut them, and have competing factories in the same regions.

TUCKER (on camera): Proponents of exporting jobs out of America to foreign countries argue that it raises the standard of living for the local workers in that country. Opponents say the only ones who benefit are the corporations.

CHARLES KERNAGHAN, NATIONAL LABOR COMMITTEE: I would say the NAFTA has failed the workers in Mexico and the United States and now they are pitting NAFTA against CAFTA. And CAFTA is going to be another step down.

TUCKER (voice-over): According to research by the National Labor Committee, wages in Honduras are 65 cents an hour, in Nicaragua, 41 cents and in Haiti, 30 cents an hour.

Bill Tucker, CNN, Acuna, Mexico.

(END VIDEOTAPE)

DOBBS: Turning now to the heat wave gripping the Southwestern U.S., officials in Arizona say the heat wave there has now claimed 20 lives. Temperatures in Phoenix today a little closer to the average for this time of year -- nonetheless, just about 108 degrees. Yesterday's high was 111 degrees, 1 degree away from a record set decades ago. Temperatures are expected to ease slightly this weekend.

Also in Arizona a huge dust storm near Maracopa County near Phoenix. Fifty-mile-per-hour winds, creating a giant wall of sand and dust that you see there. And we came across a word in reporting this story, it is, if you will, tonight's word of the day. The word is "haboob." Haboob is a violent dust or sand storm occurring mostly in Arabia, North Africa and India, but haboobs are now, at least over the past 24 hours, part of the Southwest.

Very different weather in the Atlantic region where the sixth tropical storm brought wind and rain to the Bahamas. Forecasters saying this storm is expected to miss, however, the southeastern part of the country.

At the top of the hour here on CNN, ANDERSON COOPER 360. Heidi Collins to tell us what it's all about -- Heidi.

HEIDI COLLINS, GUEST HOST, "ANDERSON COOPER 360": Thank you, Lou. Coming up next on 360, caught on tape. London police release surveillance images as they hunt for suspects in yesterday's attempted bombings. What they do have in hand is plenty of explosive evidence. It's a forensics field day.

Also, New York City transit searches. Is there a profile?

And two hot topics during the summer months, sunburns and stings, protecting yourself from the sun and pesky bugs, Lou?

DOBBS: Heidi, thank you.

The Shuttle Discovery countdown begins again tomorrow at the Kennedy Space Center. Lift-off set for Tuesday, NASA says it thinks the fuel gauge problem is fixed. That fuel gauge problem scrubbed the shuttle launch last week, but NASA says it could go ahead with lift off even if the problem is not 100 percent solved.

Still ahead here, all the week's headlines, including the nomination of John Roberts to the Supreme Court, the White House leak investigation, when I talk with three of the country's very best political journalists. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Here's a look now at how you voted on the critically important issues.

Monday, 76 percent of you thought highly irresponsible the most appropriate Bush administration reaction to China's threat of nuclear strikes against this country.

Tuesday, 79 percent of you said you support the immigration reform legislation proposed by Senators Cornyn and Kyl.

And Wednesday, 63 percent of you said John Roberts is not a good choice for the Supreme Court.

Last night, 97 percent of you said the administration isn't doing enough to cut our trade deficit with China.

Tonight we want to hear your opinion on the global war on terror, should it be styled a war against radical Islamists as the enemy in the global war on terror? Yes or no. Cast your vote at LOUDOBBS.com. We'll have those results at the end of the broadcast.

Joining me now, three of the very best political journalists in this country. In Washington, Ron Brownstein of the "Los Angeles Times," Karen Tumulty of "Time" magazine here in New York, and Jim Ellis of "Business Week." Thanks for being here.

Judge Roberts. Ron, he looks like the no-brainer. He looks like a perfect resume, the perfect fellow for the job. What is it all about? Why aren't the Democrats just saying great let's go?

RON BROWNSTEIN, LOS ANGELES TIMES: It doesn't work that way. First of all, this was a very agile pick by the president. He was -- Judge Roberts is someone who is conservative to hold together his base, but not such a crusading conservative that he provokes a full scale reaction from the Democrats.

There will, inevitably though Lou, be an argument about him. And interestingly, I think it will focus more on economic than on the social issues that many expected.

The question is, of course, is whether Democrats mount a full- scale effort to stop him. There's a majority of Republicans in the Senate. Virtually every Republican is going to vote for this judge. So the issue is pretty simple, will Democrats filibuster to stop him? The early indications are no, but that doesn't mean there won't be a serious debate with an effort to make a political statement on both sides about it.

KAREN TUMULTY, TIME: Oh, I think it's actually moving faster than that. Barring some scandalous or really incendiary piece of evidence found in Judge Roberts' background, I don't think the Democrats are likely to filibuster. And in fact, I think they pretty well decided that among themselves.

I think the key piece, the key event today, for instance, was when Judge Roberts visited Harry Reid, the Senate Democratic leader. Harry Reid came out of that meeting praising not only Judge Roberts' qualifications, but all the wonderful work that he had done for environmental interests in Harry Reid's home state of Nevada.

JIM ELLIS, BUSINESSWEEK: I think it's clear now that what's going to happen is that everybody is going to save their powder for the next nomination. I think that that's going to be make or break as far as whether the court is going a lot more conservative. And so what's going to happen is everybody is going to say, you have got almost a Boy Scout here. There's not a lot from the Democrats to be gained by roughing him up too much.

DOBBS: This guy is an Eagle Scout, Jim, come on. I mean, he has got every merit bang that an attorney can have, and a judge. I mean, he is just extraordinary in my opinion and the opinion of every attorney...

ELLIS: It's good, you know, for a change we are getting somebody on the court who actually knows something about business. I know a lot of corporate America is very happy about that.

DOBBS: That may work to their disadvantage.

ELLIS: The court has shied away from those types of cases. And even though a lot of the attention is on the social issues, you know, we actually need somebody up there who understands...

BROWNSTEIN: You know Lou, I think that's the caveat -- I agree with Karen, that there are no signs of being enough Democrats willing to filibuster. But I think there will be a debate. And it will focus on economic issues, as Jim suggested.

This is a judge that has a very limited record on the social issues, but has gone further both as a private advocate and on the bench in dealing with regulatory issues, things relating to the environment and so-forth. And I suspect that's where we're going to see the biggest dispute -- the efforts by the court majority over the past decade to limit the federal government's reach. That's what I think we're going to be talking about a lot in September.

Although, I do think it's going to be a little bit harder to get political traction when what you're talking about is the Interstate Commerce Clause of the Constitution.

DOBBS: And -- but when you have got a talent that can right as eloquently as he did about a hapless toad in California, you have already -- you've won me over, I will tell you that.

And it's going to be interesting, because I think the Democrats have a treacherous position here. As Jim Ellis says, a Boy Scout -- and Eagle Scout by any measure. And to go after him is probably a very risky thing to do here irrespective of what his business as normal.

Nothing business as normal with Condoleezza Rice's visit in Sudan. Her entourage and the press corps roughed up there by security guards.

What's your reaction, Karen? I mean, this is -- it's unthinkable that we would have our secretary of State, who is devoting so much time and energy to global diplomacy, to have her that vulnerable. I mean, that's a frightening thing, to say absolutely nothing of Andrea Mitchell and the other correspondents there.

TUMULTY: Well, I was impressed with how quickly she demanded an apology from the government over this, and I must say too, as much as we have been debating freedom of the press in this country over the last few weeks, thanks in part to my own magazine's decision to turn over Matt Cooper's notes, it does remind us that there are places in the world where it's a lot tougher to be a journalist than here.

DOBBS: Absolutely. And it's also striking that it took this episode for many people to focus on the outrage that is occurring in the Sudan, the horrible repressive violence against literally millions of people, the treatment, the raping, the violence against women.

In the context of this, because it was a dust-up over a reporter, I think a lot of people, at least we have this positive benefit, focusing on that outrage.

BROWNSTEIN: It's been the drumbeat, really, at the edge of the political debate in the U.S. for a while now, and I think you're right, Lou, this is the kind of thing that puts it more squarely in the spotlight.

DOBBS: Let's turn to China and Unocal, what many people in this country are calling an outrage. I don't know if the readers of "BusinessWeek" are among those, certainly the editors. Free markets at work here, or is this just an outright strategic play by a government- owned corporation, Jim Ellis?

ELLIS: This is just the natural consequence of China coming into its own. Whether we like it or not, China is the emerging economic power, and we are moving from an era where we were the undisputed economic power into one where we are going to have to share that with China. That's going to be a very difficult transition, because not only do they want to become an economic power, they also definitely want to become a military power that basically turns the east into their western hemisphere.

BROWNSTEIN: Lou, I'm going to disagree with Jim a little bit, in the sense that I think the CNOOC deal is really offering a kind of a wakeup call for the need to develop rules of the road for dealing with a hybrid economy, in which we are engaging in a capitalist competition with a communist nation.

I think what's interesting to me is over the last two weeks that many of the critics of the deal in Washington have focused on the question of whether CNOOC is getting favorable financing from its parent, which is of course 100 percent owned by the Chinese government, in making this bid, and it really does raise the question of how you compete with companies that have these kind of government links. There are a whole series...

ELLIS: But we compete with Airbus as it is now, complete with subsidies they get from the European governments.

The bottom line here is we're scared of the Chinese, and we will use whatever we can to sort of stop them. If this was a European company, we probably would have a different response.

DOBBS: I don't know. That's interesting, because a company like this, taking over an extraordinarily important energy asset, although it is only the ninth largest oil company, this -- what's mind-boggling to me is not the aggressive ambitions of the Chinese -- I certainly don't fault them for that or for the good college try -- it's our idiotic passive response to it, and the total lack of strategy in this country that I resent so much.

We are going to be back here in just a moment. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, CAFTA coming up for a vote, Ron. The president today calling it a jobs program. The administration before that saying it was a way to deal with China. What in the world are they doing?

BROWNSTEIN: They are trying every last way they can to get enough Republican votes to pass this, this week in the House. One hundred and two Democrats in the House voted for NAFTA 12 years ago. They will be lucky to get 10 or 12 for this. It's forcing them to put a lot of pressure on Republicans.

Watch for a sandwich here, Lou. A vote first on a vote to punish China, a vote on CAFTA, and then holding out to the end, a vote on highway construction, which gives them both carrots and sticks to pressure Republicans who they need to pass this.

DOBBS: This is embarrassing. Karen, your thoughts.

TUMULTY: Well, as of this moment, though, they do not have the votes. Roy Blunt is whipping this pretty hard, but they are still short.

BROWNSTEIN: The House Republican leaders don't lose a lot of votes in that chamber, though.

DOBBS: Jim Ellis, what happens -- is there a role here for American working men and women in their calculation?

ELLIS: Let's not put that calculation out here. This is Washington we are talking about. This is politics. I mean, basically, the president wants to maintain momentum. I don't think he's going to make it. It's just -- and the other thing is that I really doubt that it will really affect the United States that much if it doesn't pass.

DOBBS: Thank you very much. You get the last word, Jim Ellis. Karen, Ron...

TUMULTY: Thank you.

DOBBS: ... Jim, thank you.

Now, "Heroes," our weekly tribute to our men and women in uniform. Tonight, the story of Lance Corporal Randy Lake. His bravery during the fierce battle of Falluja earned him the Bronze Star.

Casey Wian has his story.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Training exercises have a whole new meaning when you've been to war.

LANCE CORPORAL RANDY LAKE, U.S. MARINE CORPS: You are constantly looking for cover in case you start -- you get shot at or something.

WIAN: The hollow buildings and phony ruins at Camp Pendleton, California, remind Lance Corporal Randy Lake of Falluja and the battle last November that changed his life.

LAKE: I still look back on that night, and I just wonder how I never got touched by anything.

WIAN: His platoon approached a house on foot, to make sure no insurgents were inside.

LAKE: We made entry into a room like this, and we came down, and me and my other team member, Corporal Vajda (ph), made entry into this room right here.

WIAN: Shots rang out. Lake's best friend was hit and fell in a doorway. With grenades going off all around him, Lake saw a bomb attached to a nearby door. He tried to warn his platoon of the danger and pull out his wounded friend, but it was too late.

LAKE: And I came back around to go grab him, and they blew the house.

WIAN: Lake was blown out of the house by the explosion, but amazingly, was not injured.

LAKE: I was a little groggy and I kind of lost hearing, but, like, the training just kicked in, and I was going around helping people, like just making sure everybody was OK, see who was all, like, still there. Just made sure my squad was there. A lot of my squad was taken out.

WIAN: The brush with death and the loss of his friend changed Lance Corporal Lake.

LAKE: I don't take a lot of things for granted anymore, like with friends and family. Because you just -- you don't know what could happen the next day.

WIAN: Lake says he was surprised to be awarded a Bronze Star with a combat distinguishing device.

LAKE: In my mind, I mean, I did what anybody would have done for their best friend. They would have went in there no matter what to get him.

WIAN: Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: And our best to Corporal Lake.

The results of the poll tonight: 80 percent of you say the United States should declare that radical Islamists are the enemy in this global war on terror.

Finally tonight, "New York Times" reporter Judith Miller has now been in jail for 16 days for her refusal to reveal her confidential sources in the White House leak case. Thanks for being with us tonight. Please join us here next week. Our guests will include former independent counsel Kenneth Starr, Senator Lindsey Graham, and AFL-CIO Secretary Treasurer Richard Trumka. That's Monday. Please be with us.

Good night from New York. Have a great weekend. ANDERSON COOPER 360 starts now, with Heidi Collins -- Heidi.

COLLINS: Thank you, Lou.

END

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